CurrentConnecticut Insurance DepartmentPolicy HC-69

Legitimate Disputes — Connecticut Unfair Insurance Practices

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Guidance for Connecticut health insurers and other entities responsible for paying health care claims on permissible payment delays, legitimate-dispute investigations, and claim-processing deadlines.

Policy Summary

PayerConnecticut Insurance Department

PolicyLegitimate Disputes — Connecticut Unfair Insurance Practices

Policy CodePolicy N/A

Change TypeOperational guidance

Effective DateJune 16, 2008

Next Review DateN/A

Key ActionSend written notice of claim-information deficiencies within 30 days and process the claim within 30 days after receiving the necessary information.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

45 daysClean-claim payment deadline

30 daysDeficiency notice deadline

30 daysPayment after requested information

15%/yrInterest for untimely payment

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CurrentConnecticut Insurance DepartmentPolicy HC-69

Legitimate Disputes — Connecticut Unfair Insurance Practices

Customize your policy alerts

Sign up for Connecticut Insurance Department Policy HC-69 alerts

Get alerted when Policy HC-69 changes without checking for updates manually.

Monitor payer policy activity

Receive email alerts as soon as relevant payer policies are published or updated.

Guidance for Connecticut health insurers and other entities responsible for paying health care claims on permissible payment delays, legitimate-dispute investigations, and claim-processing deadlines.

Policy Summary

PayerConnecticut Insurance Department

PolicyLegitimate Disputes — Connecticut Unfair Insurance Practices

Policy CodePolicy N/A

Change TypeOperational guidance

Effective DateJune 16, 2008

Next Review DateN/A

Key ActionSend written notice of claim-information deficiencies within 30 days and process the claim within 30 days after receiving the necessary information.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

45 daysClean-claim payment deadline

30 daysDeficiency notice deadline

30 daysPayment after requested information

15%/yrInterest for untimely payment

8Legitimate-dispute categories

Legitimate Disputes and Claim-Payment Rules

General Clean-Claim Payment Rule

Under Connecticut's Unfair Insurance Practices Act (CUIPA), an insurer or other entity responsible for payment must pay a clean accident-and-health claim within 45 days after receiving the claimant's proof of loss or the health care provider's request for payment, unless a stated exception applies.

GENERAL CLEAN-CLAIM RULE

Pay accident-and-health claims, including claims for payment or reimbursement to health care providers, no later than 45 days after receipt of the claimant's proof of loss form or the provider's request for payment filed according to the insurer's practices or procedures.
Conn. Gen. Stat. §38a-816(15)(B).
A claim submitted with the information required by Conn. Gen. Stat. §38a-477 is a clean claim ripe for processing and is not deficient merely because the payer seeks additional information.
A payment delay based on a legitimate dispute requires a determination by the Insurance Commissioner under Conn. Gen. Stat. §38a-816(15)(A).
If information needed to process the claim is deficient, send written notice to the claimant or provider identifying all alleged deficiencies no later than 30 days after receipt of the claim.
The deficiency determination must be made in accordance with Conn. Gen. Stat. §38a-477.
After receiving the requested information, pay the claim no later than 30 days after receipt of that information.
The 45-day payment rule may also be delayed when the Insurance Commissioner determines that a legitimate dispute exists as to coverage, liability, or damages, or that the claimant fraudulently caused or contributed to the loss.
Conn. Gen. Stat. §38a-816(15)(A).

Acceptable Legitimate-Dispute Categories

The following categories are considered legitimate disputes for which an insurer or other claim-paying entity may delay payment for a reasonable period while promptly investigating and attempting to resolve the issue.

ONE OF THE FOLLOWING LEGITIMATE DISPUTE CATEGORIES

Medical information needed to determine whether the claim is preexisting.
The investigation must be consistent with Insurance Department Bulletin HC-66, dated September 24, 2007, and limited to issues directly related to the alleged preexisting claim or condition. An inconsistent investigation may be considered post-claim underwriting.
Medical information needed to determine whether the services rendered are medically necessary, including whether services are cosmetic or experimental.
The determination must conform to the definition of medically necessary under Conn. Gen. Stat. §§38a-482a and 38a-513c.
Medical information needed to determine whether services are consistent with emergency treatment.
An emergency medical condition is one that a prudent layperson, acting reasonably, would have believed required emergency medical treatment under Conn. Gen. Stat. §38a-478r. Providers must code the presenting symptoms of emergency claims, and hospitals must record the code on UB-92 locator 76 or its successor. The presenting symptoms or final diagnosis, whichever reasonably indicates an emergency condition, is the basis for reimbursement or coverage. Investigation is permitted only when the UB-92 claim form is not completed as required; when the required information is present, the claim is complete under Conn. Gen. Stat. §§38a-477 and 38a-815(16)(B) and must be processed without further investigation.

Unlisted Disputes and Enforcement

Investigations must be promptly concluded. Delays outside the listed categories require advance Commissioner approval for the specific claim and may otherwise constitute a per se CUIPA violation.

UNLISTED DISPUTES AND ENFORCEMENT

Promptly conclude all reviews and investigations described in these guidelines.
When claim information is deficient, send written notice to the claimant and provider identifying the alleged deficiencies and follow up within 30 days when requested information has not been received.
Process the claim within 30 days after receiving the necessary information.
A claim settlement delay based on an investigation or inquiry outside the listed legitimate-dispute categories is not a legitimate dispute under CUIPA unless the claim-paying entity first seeks and obtains the Commissioner's approval for the specific claim under Conn. Gen. Stat. §38a-816(15)(A).
To request approval, identify the circumstances and the type of information lacking and necessary to settle the claim, and submit that information with a copy of the submitted claim to Consumer Affairs for consideration and recommendation to the Commissioner.

Payment Deadlines and Claim Coding

Emergency claim presenting-symptom reportingRevenue

UB92 Locator 76

Location for recording the presenting-symptom code for emergency claims, or its successor on a replacement claim form

Clean-claim payment deadline

Payment deadline45 days after receipt of the claimant’s proof of loss form or the health care provider’s request for payment

Applies toAccident and health claims submitted in accordance with the insurer’s practices or procedures

ExceptionThe deadline may be affected by a deficiency in information needed to process the claim or a Commissioner-determined legitimate dispute

Deficiency notice deadline

Notice deadlineWritten notice must be sent within 30 days after the insurer receives the claim

Notice recipientThe claimant or health care provider, as applicable

Investigation, Documentation, and Notification Requirements

Documentation Required

Preexisting-Condition Investigation

Limit any investigation into whether a claim is preexisting to medical information directly related to the alleged preexisting claim or condition. Investigations must be consistent with Bulletin HC-66; unrelated post-claim underwriting is not appropriate.

Documentation Required

Medical Necessity Review

Investigate only the medical information needed to determine whether rendered services are medically necessary, including whether they are cosmetic, experimental, or otherwise excluded, consistent with the applicable statutory definition of medical necessity.

Billing Rule

Key Terms and Prohibited Delays

Clean claim

DefinitionA claim submitted with the necessary information required under Connecticut law and therefore ripe for processing

Applicable standardThe information must satisfy Conn. Gen. Stat. §38a-477

ExceptionThe claim is not treated as a clean claim when the Insurance Commissioner has determined that a legitimate dispute exists

Legitimate dispute

DefinitionA Commissioner-recognized dispute concerning coverage, liability, or damages, or a circumstance involving fraudulent causation or contribution to the loss

Payment effectThe dispute may permit a reasonable delay while the matter is resolved

Policy Summary

PayerConnecticut Insurance Department

PolicyLegitimate Disputes — Connecticut Unfair Insurance Practices

Policy CodePolicy N/A

Change TypeOperational guidance

Effective DateJune 16, 2008

Next Review DateN/A

Key ActionSend written notice of claim-information deficiencies within 30 days and process the claim within 30 days after receiving the necessary information.

SourceLink

On This Page

Coordination-of-benefits payment order or payment information.

Investigate upon presentation of the initial claim when dual coverage is indicated. Do not investigate subsequent claims more frequently than once yearly unless changed circumstances are indicated. Investigation may determine payment priority or, when another insurer is primary, permit the secondary carrier to withhold payment until primary payment information is received; the secondary carrier must notify the claimant that payment is being withheld pending proof of the primary payer's determination. Follow Regs. Conn. State Agencies §§38a-430-1 through 38a-430-7.

Dependent eligibility issues beyond routine information ordinarily contained in enrollment records.

Permitted investigations include verifying whether a dependent child continues to meet the definition of a dependent under Conn. Gen. Stat. §§38a-497 and 38a-554, verifying marital status when information varies from the records, and verifying incapacity and dependency for mentally or physically handicapped dependents under Conn. Gen. Stat. §§38a-489 and 38a-515. For such dependents, proof must be furnished within 31 days after the child reaches the limiting age; continuing proof may be required at any time, but after two years may not be required more frequently than annually.

Accident investigations for health care services rendered in response to accidental injuries when information about the nature of the accident or how the injuries were sustained is missing or incomplete.

Limit the investigation to issues directly related to the accident.

Investigations to rule out suspected fraudulent claims by a member, subscriber, enrollee, or provider.

The carrier should be able to substantiate to the Insurance Commissioner the cause for suspecting alleged fraudulent dealings.

Out-of-country issues, such as monetary conversion rates for the date of service or translation of bills submitted in a foreign language or denominated in a non-American currency.

A reasonable delay is permitted to obtain conversion rates or translations. Unless circumstances are unusual, these activities should be completed in sufficient time to process the claim in less than 45 days.

The Department will track approved requests and may add categories to the approved legitimate disputes.

Claim settlement delays that are not legitimate disputes under the bulletin or a case-by-case Commissioner determination are per se violations of CUIPA and are subject to appropriate penalties.

Entities taking longer periods to process claims may be reviewed under Conn. Gen. Stat. §38a-816(6), relating to unfair claim settlement practices.

Failure to pay within the applicable statutory period, absent a legitimate dispute or other permitted exception, requires payment of the claim amount plus interest at 15% per annum, in addition to any other applicable penalties.

When the interest due is less than one dollar, the insurer must deposit it in a separate interest-bearing account and donate the accumulated amount to The University of Connecticut Health Care Center at the end of the calendar year.

Notice contentThe notice must identify all alleged deficiencies in information needed to process the claim

Payment after requested information

Payment deadlineWithin 30 days after the insurer receives the requested information

Required informationThe information necessary to process the claim

Follow-up expectationThe insurer should follow up within 30 days when necessary requested information has not been received

Recurring coordination-of-benefits investigation

Recurring investigation frequencyNo more frequently than once yearly

Initial investigationInvestigate coordination-of-benefits information upon presentation of the initial claim when dual coverage is indicated

ExceptionA subsequent investigation may occur more frequently when changed circumstances are indicated

Disabled-dependent proof deadline

Proof deadlineWithin 31 days after the child’s attainment of the limiting age

Required proofProof of the child’s incapacity and dependency

Responsible partyThe policyholder or subscriber must furnish the proof to the insurer or health care center

Post-limiting-age proof frequency

Frequency after two yearsNo more frequently than once every year

Waiting periodThe two-year period begins following the child’s attainment of the limiting age

Proof subjectContinuing incapacity and dependency of a mentally or physically handicapped dependent

Emergency Claim Coding

For emergency claims, code the presenting symptoms. Hospitals must record the presenting-symptom code on UB92 form Locator 76 or its successor; the presenting symptoms or final diagnosis, whichever reasonably indicates an emergency medical condition, will support reimbursement or coverage when the symptoms reasonably indicated an emergency.

Insurers may investigate emergency claims only when the UB92 claim form was not completed as required.
When the required information is present, the claim is complete and must be processed without further investigation.

Documentation Required

Coordination of Benefits

Investigate coordination-of-benefits information on the initial claim when dual coverage is indicated. Do not investigate subsequent claims more than once yearly unless changed circumstances are indicated, and apply the Connecticut COB regulations.

Investigate to determine payment priority when dual coverage is indicated.
Investigate whether another insurer is the primary payor.

Note

Secondary-Payer Payment Hold

When another insurer is the primary payor, a secondary carrier may withhold payment until it receives the primary carrier’s payment determination needed to establish secondary liability. The secondary carrier must notify the claimant that payment is being withheld pending proof of the primary payor’s determination.

Documentation Required

Dependent Eligibility Verification

Verify dependent eligibility only for non-routine issues that are not contained in enrollment information.

Verify whether a dependent child continues to meet the statutory dependent definition.
When information differs from the records on file, seek information to verify marital status.

Documentation Required

Disabled-Dependent Proof

For a mentally or physically handicapped dependent, obtain proof of incapacity and dependency within 31 days after the child reaches the limiting age. Continuing proof may be required at any time; after two years, periodic proof may be required, but no more frequently than annually.

Documentation Required

Accident Investigation

Claims for health care services arising from accidental injuries may be investigated when information about the nature of the accident or how the injuries were sustained is missing or incomplete. Limit the investigation to issues directly related to the accident.

Denial Risk

Suspected Fraud Investigation

A claim submission may be investigated for cause when it creates a suspicion of fraudulent activity by the member, subscriber, enrollee, or provider. Be prepared to substantiate to the Insurance Commissioner the basis for suspecting alleged fraud.

Note

Foreign-Language and Foreign-Currency Claims

Claims containing bills in a foreign language or charges in a non-U.S. currency may be reasonably delayed to obtain English translations or the applicable date-of-service currency-conversion rates. Unless circumstances are unusual, these activities should be completed in time to process the claim in less than 45 days.

Documentation Required

Deficiency Notice and Follow-Up

When information needed to process a claim is deficient, send written notice of the alleged deficiencies to both the claimant and the health care provider, and follow up within 30 days when requested information has not been received. Process the claim within 30 days after receiving the necessary information.

Promptly conclude all reviews and investigations.
Longer delays may be subject to Department review as potential unfair claim settlement practices.

Prior Authorization

Unlisted Dispute Approval

Delays based on circumstances outside the listed legitimate-dispute categories require prior approval from the Commissioner for the specific claim. Submit the circumstances, the type of information lacking and necessary to settle the claim, and a copy of the submitted claim to Consumer Affairs for consideration and recommendation.

Unapproved delays outside the listed categories may constitute a per se CUIPA violation and may be subject to penalties.
The Department may add approved categories as circumstances are identified.

Recognition requirementThe Insurance Commissioner must determine that the legitimate dispute exists

Emergency medical condition

DefinitionA condition such that a prudent layperson, acting reasonably, would have believed that emergency medical treatment is needed

Provider reportingEach provider must code the presenting symptoms of all emergency claims

Hospital reportingEach hospital must record the presenting-symptom code on UB92 form Locator 76 or its successor

Unauthorized claim delay

DefinitionA claim delay outside the listed legitimate-dispute categories or without case-specific Commissioner approval

Legal consequenceThe delay is considered a per se violation of CUIPA

Potential consequenceThe delay may be subject to the appropriate penalties

Approval routePrior approval requires submission to Consumer Affairs of the circumstances, missing information, and a copy of the submitted claim for consideration and recommendation to the Commissioner